Before I start this blog, I would just like to make it clear that I am not a Buddhist. In fact I would class myself as an atheist. I thought I would just get that one in there quickly before I frighten too many people off!
However about ten years ago I did look into the principles of Buddhism to see whether it would ‘be of me’, and despite not taking up active Buddhist practice, I do still reflect on the principles of the religion (actually it’s more a way of life than a religion, but that beside the point) and how they manifest themselves in my life. So I thought I would get them down in a post as a reminder to me, however you may find them useful also.
There are a couple of key principles of Buddhism which I can directly relate to trading and my trading journey.
Life almost always involves suffering
This sounds quite depressing right? But think about it for a moment. There is no doubt that life can be tough. There are winners, and by definition, there are loser in life. Relationships, health, wealth, employment, accommodation, positive feelings, can all be lost or taken away. They are all impermanent. The aspiration should be to accept this situation and not try to deny its existence. Now I’m not for one minute saying that we should just lie back and accept that life is just going to trample all over us. We should take ownership of our lives and do what we can to prevent suffering to ourselves. However, sooner or later we are all going to experience suffering in some form and if we can accept fully that this will occur, then we are going to be is a far better psychological state to be able to deal with it.
Nobody actively wants to have a losing trade, but if we wholeheartedly and truly accept that they are going to occur, then when they do, they will not have the power to hurt us and will be easily overcome. Trading is a microcosm of life – everything is impermanent.
The root of all suffering is craving
When I look back at my life and remember times when I was sad, jealous, angry etc. (all of which we can class as forms of suffering), I can identify that carving was at the root of my discomfort. When we hold on to tightly to things, people, states of mind and so on, we create added pain when they are no longer with us and risk losing them forever because the craving was so intense. Do you remember the intense feeling of loss when that girl or boy dumped you at school and you did anything and everything to try and prevent it happening? It really hurt, right? I used to be an Addictions Therapist so I know a thing of two about craving!
When we hold onto a trade that isn’t working we cause discomfort within ourselves. And the longer we hold on, the more the discomfort grows. Resign yourself to the fact that, in this instance, you were wrong and let it go. All the while you hold on to a trade that isn’t working, you may be missing an opportunity to take the next trade which will work.
I believe this is also relevant to the practice of trading as a whole. I want to be a successful Sports Trader, but I know if I hold on to that dream too tightly, I risk losing it. The craving for this dream will psychologically make it more difficult for me to achieve it. I know that, ironically, it will cause the loss of the very thing I want to achieve.
Living in the moment
Done well, the Buddhist practice of meditation is to enter the state of being in the present moment; or what some refer to as the now. In the present moment there is nothing but calm and serenity. Negative feeling such as regret, guilt and shame (states of suffering) come from the past, whilst fear, anxiety and worry (states of suffering) come from the future. In the now however, there is nothing. Furthermore, in the present moment we have a greater understanding of ourselves. We become observers of our own thoughts and feelings – a state of self-awareness. In the calm of the present moment we can identify what is going on in our minds and effectively manage those thought and feelings rather than blindly being slaves to them.
An experience therapist who I used to worked with once said to me, “Humanity has never been as far as it has come today. Every present moment is new ground for humanity, and how privileged we are to be here to experience it. Don’t let the present moment pass you by.” I’ve never forgotten those wise words.
Now I’m not suggesting we should sit at our trading desks, with our legs crossed and our eyes closed while we trade. I’m open to most suggestions but I think even that would be beyond me! But what I am trying to convey is that by being in the state of now, i.e. in the calmness of the present moment, it provides us with the psychological environment where we can focus and perform to the best of our ability with the minimum of distraction from our minds. Our enhanced self-awareness from being in this state will help us manage any feelings of disappointment after a losing trade, and as importantly, euphoria following a winning trade. It will help to keep us grounded.